Illinois law allows a business to incorporate and be recognized as its own legal entity. An incorporated business acts in its own name, whether buying and selling property, assenting to contracts or exercising legal rights. The office of the Secretary of State is the agency that receives applications for incorporation in Illinois, and they must be completed in conformity with certain guidelines.
Benefits of Incorporation in Illinois
Certain benefits inure to a business in Illinois that has incorporated over one that has not. First, a corporation's liabilities can never go beyond the amount invested in the business by the owners. Without incorporation, the personal property of business owners is at stake should the company become unable to fulfill its debts. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Caseyville area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more cumbersome. Finally, ownership of a corporation is divided into equal portions or "shares" of stock, which may be bought and sold much more easily than the ownership of an unincorporated business.
Costs of Incorporation
Incorporation comes at a price. First, Illinois may charge a filing fee to process applications for incorporation. Also, the corporation will pay taxes as its own entity. In other words, the profits a corporation makes are now taxed separately, while any disbursements to shareholders are taxed as individual income. This is called double taxation. However, a business may avoid this disadvantage with proper planning and assistance from a local Caseyville lawyer.